(CercleFinance.com) – That’s it, it’s done and well done, the CAC40 (+0.9%) crosses 8,000 and rises towards 8,025: the Paris Stock Exchange gives in to a gentle euphoria in reaction to the words of Christine Lagarde , at the end of its monetary policy meeting.
The Euro-Stoxx50 soars +1.1% to 4,970, with 5,000 in its sights within a few hours (or before the publication of the ‘NFP’ on Friday at 2:30 p.m.?).
The European Central Bank has in fact maintained – as planned – the deposit rate at 4% but it reduces its inflation projections in the euro zone, to 2.3% in 2024, then to 2% in 2025 and to 1. 9% in 2026.
Excluding energy and food products (‘core inflation’), its underlying inflation assumptions have also been revised downwards to settle on average at 2.6% for 2024, then at 2.1% and at 2 % respectively over the following two years.
According to the teams at Muzinich, a management company specializing in credit, the overnight interest rate swap market estimates the probability that the ECB will reduce its rates by 25 basis points at 86%. month of June.
This means that a rate cut is possible as soon as the FED acts in this direction, probably from mid-June.
And an easing of the interest rate will quickly become necessary since the ECB has also lowered its growth projection for 2024, to 0.6%.
The euro zone economy is then expected to recover and grow by 1.5% in 2025 and 1.6% in 2026, supported first by consumption, then also by investment.
The bond markets are also euphoric by the ECB’s performance since our OATs relax by -5Pts towards 2.735%, Bunds by -4Pts towards 2.2900%, Italian BTPs by -6.5Pts towards 3.5950%.
Wall Street also begins the session in clear progress with the S&P500 climbing +0.7% to 5,140: the index could set a historic closing record (for an absolute record, you will have to go for 5,150).
The Nasda-100 progresses by +0.8% towards 18,160… 18,300 is not very far away.
There were also several US figures: the US trade deficit widened to $67.4 billion in January, compared to $64.2 billion the previous month (which was revised from an initial estimate of 62.2 billion), according to the Department of Commerce.
This 5.1% increase in the deficit from one month to the next reflects a 1.1% increase in imports of goods and services by the United States, to 324.6 billion dollars, while its exports have almost stagnated (+0.1%) at 257.2 billion.
US productivity is revised ‘unchanged’ at 3.2% and weekly jobless claims also remained almost stable last week.
On the foreign exchange market, the Dollar strengthened a little after the ECB meeting and the Euro crumbled by -0.1% towards 1.089 against the dollar.
The general easing of rates (except for T-Bonds unchanged at 4.105%) is propelling Gold to new heights: $2,153/Oz.
On the energy side, the oil market is stabilizing after its surge the day before, the announcement of an anecdotal increase in crude oil stocks having been accompanied by a decline in reserves of gasoline and refined products.
Brent consolidates by 0.5% around $82.4 per barrel while American light crude (West Texas Intermediate, WTI) drops 0.6% to $78.6.
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